Australia

ACIP reviews innovation patents

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On 28 February, the Minister directed ACIP to report on the innovation patent system.

On 17 August, ACIP published an issues paper (pdf) and now seeks your comments by 14 October 2011.

According to the announcement of the issue paper’s release:

In recent years a variety of concerns have been raised about the innovation patent system and whether it is meeting its original objectives. A key concern is that an innovation patent is overly difficult to invalidate and the remedies for infringement are overly generous. Another concern is that innovation patents are being used to obtain a form of quick protection for higher level inventions while a standard patent is being pursued. Also, the innovation patent system has never been reviewed to assess whether it remains effective and appropriate for Australia now and in the future.

Innovation patents (which are not for business schemes) are difficult to invalidate after Dura-Post? The Full Court confirmed that the test of ‘innovative step’ does not involve a sort of obviousness penumbra over common general knowledge. Rather, the patent is innovative unless it can be shown that the difference between the patent and the prior art do not make a substantial contribution to the working of the ‘invention’. This was apparently derived from Griffin v Isaacs. As the trial judge explained with the apparent approval of Kenny and Stone JJ at [70] and [79]:

Be that as it may, the feature of what Dixon J said was the disjunctive nature of the concepts – one was ‘make no substantial contribution to the working of the thing’; the other was ‘involve no ingenuity or inventive step’. The first alternative has been taken by Parliament virtually verbatim from the judgment. The focus is upon working of the invention (as claimed) not to the degree or kind of variation from the kinds of information set out in s 7(5). In other words, the variation from the kinds of information might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step. … In my view the provenance of the phrase ‘make no substantial contribution to the working of the invention’ indicates that ‘substantial’ in this context means ‘real’ or ‘of substance’ as contrasted with distinctions without a real difference.

Rather than a modified inventive step test, it is a modified novelty test.

The Issues Paper runs to some 28 pages.

Interestingly, just over 11,000 innovation patents have been granted and 1,790 certified.Over 80% are to Australian inventors and around half are to Australian individuals as opposed to corporations (the proportion of certifications falls to 41%). The proportion of Australian grantees vs foreign appears to be falling over time.

1,011 of the grants are divisionals from applications for standard patents. For the first few years, that was about 5% of all divisional applications, but it has been at least 10% since 2006 with a couple of years getting closer to 14%. This leads to concerns that innovation patents are being used to get ‘quick’ rights.

There are also concerns that the pharmaceutical industry is using the system to ‘evergreen’ its patent portfolios.

The questions (although ACIP would like to take this opportunity to provoke discussion generally):

  1. Effectiveness in stimulating innovation
  2. Does Australia need a utility model?
  3. Does it cost too much?
  4. Is the cost of certification dissuading people from seeking certification?
  5. How do (people in) other jurisdictions jurisdictions perceive the innovation patent?
  6. Are there concerns about the uncertainty arising from the delays in getting certification?
  7. Are the current remedies appropriate?
  8. If the available remedies are reduced (e.g. you couldn’t get an injunction) would costs of (getting) an innovation patent be justified?
  9. How do you think the use of divisionals is working (and why did you do it)?

ACIP announcement

Issues paper (pdf)

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Senate sends tobacco bill to Committee

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The Senate has referred the Trade Marks Amendment (Tobacco Plain Packaging) Bill 2011 to the Legal and Constitutional Affairs committee.

This bill would give the Government power to “fix” gaps in the Tobacco (Plain Packaging) Bill by simply making regulations. The House of Representatives Health and Ageing committee has recommended the bill be passed.

The Committee is due to report by 2 September with the Committee’s report due by 19 September.

Senate sends tobacco bill to Committee Read More »

House committee recommends Parliament pass the tobacco plain packaging legislation

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In a report tabled today (pdf), the House of Representatives’ Health and Ageing committee has recommended that the House pass the tobacco plain packaging legislation.

The Committee noted the submissions about possible breaches of TRIPS, the Paris Convention, the Constitution etc. and said at [1.63]:

While the Committee recognises that there are … complex legal issues relating intellectual property and trade marks, it considers these issues to be beyond the purview of a Committee formed to consider matters directly related to health and/or ageing. Therefore the Committee has decided to confine its comments to evidence relating to health implications of the legislation. ….

Link to html links

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Apple v Samsung DownUnder

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At (Foss Patents‘) last count, the war between Apple and Samsung now ranges across 4 continents and 11 different courts in 9 countries. (For the start of the war, start here.)

As of yesterday, one of those countries is Australia where, on Apple’s application for an interlocutory injunction, in return for an undertaking as to damages Samsung gave undertakings:

  1. Until the determination of this proceeding or further order of the Court, the respondents and each of them, by themselves, their servants or agents or otherwise, without admission of liability will not without the licence of the first applicant, import, promote, offer to supply, supply, offer for sale or sell in Australia the Galaxy Tab 10.1 device the subject of paragraph 3 of the affidavit of Reginald Leones affirmed 28 July 2011.
  2. Until the determination of this proceeding or further order of the Court, the respondents will on the provision of suitable confidentiality undertakings, provide to the solicitors for the applicants 3 samples of the version of the Galaxy Tab 10.1 device intended for launch in Australia at least 7 days prior to the date of intended distribution to sales channels for the purpose of review and analysis.
  3. Until the expiration of the 7 day period referred to in paragraph 2 above, without any admission of liability, the respondents and each of them, by themselves their servants or agents will not:
(a)     advertise;
(b)	seek expressions of interest from consumers in relation to;
(c)	sell;
(d)	authorise or facilitate the advertisement by third parties of; or
(e)	otherwise supply to consumers,
the device referred to in paragraph 2 above.

At least as reported in the media here, Apple’s claim doesn’t appear to be relying on trade dress but, rather, the more concrete rights conferred by patents. According to the Sydney Morning Herald, the patents in dispute are:

Standard Patents
- 2008201540: List scrolling and document translation, scaling, and rotation on a touch-screen display
- 2005246219: Multipoint touchscreen
- 2007283771: Portable electronic device for photo management
- 2009200366: List scrolling and document translation, scaling, and rotation on a touch-screen display
- 2007286532: Touch screen device, method and graphical user interface for determining commands by applying heuristics
Innovation Patents
- 2008100283: List scrolling and document translation, scaling, and rotation on a touch-screen display
- 2008100372: Electronic device for photo management
- 2009100820: Unlocking a device by performing gestures on an unlock image
- 2008100419: Unlocking a device by performing gestures on an unlock image
- 2008101171: Portable electronic device for imaged-based browsing of contacts

The Court would have required an undertaking as to damages as part of the price for awarding an interlocutory injunction pending trial if it had been pressed to decide the application.

Samsung subsequently issued a press release claiming in effect that it’s all a misunderstanding and it was never going to release the US version of its Galaxy Tab 10.1.

From the perspective of a US patent lawyer, Samsung’s position looks pretty weak. On the other hand, Patentology thinks Samsung hasn’t conceded much and has the upper hand.

Samsung is making a special version of the Galaxy Tab for Australia?

Apple v Samsung DownUnder Read More »

Streamlining patent applications

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Back in February, the Prime Ministers of Australia and New Zealand issued a statement about harmonising IP laws (and procedures) between their countries.

Today, the Minister for Innovation, Industry and Science and the New Zealand Commerce Minister issued a further statement “revealing” that:

  1. there will be a single application process for seeking patents in both countries from 2013; and
  2. a single examination of the application for both countries will be introduced from 2014.
The two countries’ patent laws will continue to be different but, when these steps are introduced, there will be an integrated application and examination process to get a patent in both countries.
According to the Australian Minister:
The savings in professional costs alone could be as high as $2,000 to $5,000 per invention — money that should and will stay in the pocket of the innovator.
Not entirely clear from the information released officially how things have progressed since February. Press Release here; Fact Sheet there (pdf).

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Scope of disclosure in an innovation patent

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Patentology has a nice summary of the innovation patentee’s successful appeal in Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2011] FCAFC 83.

One point: it seems like the disclosure in the body of the specification supporting the broadest claim was at a level of generality similar to that upheld by the High Court in the first round of Lockwood. Wonder how that will hold up for future application under the (proposed) Raising the Bar legislation?

Secondly, the (now) infringer’s best line of defence (apart from invalidity) seems to have turned on trying to argue (now unsuccessfully) that incorporating additional integers in the accused gutting machine to those specified in the claim. Bennett J gave it short shrift.

Scope of disclosure in an innovation patent Read More »

Phillip Morris sues Australia!

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Phillip Morris has announced that it plans to sue Australia under the Australia-Hong Kong (SA) Bilateral Investment Treaty over the planned plain packaging legislation.

What the Government is proposing to do

Under the proposed Tobacco Plain Packaging Bill 2011, tobacco companies would be required to adopt a prescribed form of packaging for tobacco products.

In its most recent form, this would involve all tobacco companies using the same olive brown colour for their packaging with large, graphic images and health warnings. Some illustrations here. The contemplated regulations would limit brand names to be positioned on the top, bottom and a designated position on the front of the box in Lucida sans serif font, point size 14. (See pp. 12 and 13 of the Consultation Paper (pdf).

The trade mark lawyers amongst us will notice that clause 15 of the proposed bill will preclude a registered trade mark from being removed for non-use resulting from the strictures imposed by the proposed legislation.

The announced intention is for the laws to come into full operation on 1 July 2012. The proposal is only in exposure draft form at this stage, with public comment being scheduled to have closed by 6 June. However, the Opposition has apparently indicated its support for the Government’s position.

What Phillip Morris claims

If you read a newspaper in Australia, you can hardly have failed to notice the advertisements taken out by the tobacco companies violently opposed to this plan. There is also a website.

Phillip Morris has taken matters a step further and lodged a notice of claim against Australia under the Australia-Hong Kong (SAR) Bilateral Investment Treaty.

Unlike Free Trade Agreements and WTO / TRIPS, apparently, companies can bring claims against a party (alleged) to be in breach of its treaty obligations, not just another country party.

It would appear that Phillip Morris is not just after compensation but also an order requiring Australia to suspend operation of the law.

Details about the basis of Phillip Morris’ claim are sketchy at this stage. According to Phillip Morris’ own News Release:

“The forced removal of trade marks and other valuable intellectual property is a clear violation of the terms of the bilateral investment treaty between Australia and Hong Kong. We believe we have a very strong legal case and will be seeking significant financial compensation for the damage to our business”.

The speculation is that Phillip Morris will argue that the proposed law is an expropriation of Phillip Morris’ investments (trade mark rights) without fair compensation: see Article 6.

According to its Press Release, Phillip Morris has apparently garnered support from an eminent Georgetown professor (and Harvard graduate) for its position.

The Government has previously denied its plans will breach its international obligations.

Assoc. Prof. Jurgen Kurtz at Melbourne University has a very interesting consideration of the issues, noting that there is case law which would support the Government’s position as well as a contrary line. Prof. Rothwell from the ANU also explores the issues. He also reportedly contends that Phillip Morris may well have lodged its complaint too soon as the bill is not law yet, although, presumably, that would not preclude another complaint at a later stage.

The News Release also indicates that a period of 3 months’ negotiating follows before an arbitration proceeding is implemented under the Arbitration Rules of the United Nations Commission on International Trade Law 2010. The process will not be a short one!

Phillip Morris sues Australia! Read More »

How much to pay for an infringement

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Over at the Fortnightly Review, Ass. Pro. David Brennan takes issue with the economists who argued that Larrikin should not have been paid any damages for the Kookaburra infringements.

The economists’ argument seems to have been that Larrikin didn’t lose any sales as a result of Men at Works’ infringements and so suffered no loss.

Damages under s 115(2) of the Copyright Act are compensatory: that is, they are calculated to compensate the copyright owner for the loss suffered as a result of the infringement. One way to measure that may be the profit the copyright owner lost on sales which typically applies where the copyright owner and the infringer are competing in the same market. One problem with this is that the figure for lost sales must be discounted to reflect infringements by the infringer which would never have been sales made by the copyright owner. So for example in Autodesk v Cheung, the infringer gave the pirate copies away for free while the copyright owner’s genuine software programs sold for hundreds of dollars.

Another measure often used is the licence fee approach, particularly applicable where the owner exploits the copyright by licensing. So, Autodesk wanted the licence fees it would have been paid as if Cheung had taken out a distribution agreement like its other distributors. Wilcox J was not prepared to order damages at a reasonable royalty level because, as is typically the case, there was no way Autodesk would have licensed Cheung or, for that matter, that Cheung would have paid for a licence from Autodesk. In that situation, Wilcox J felt that the basis for a reasonable royalty — the price a hypothetical willing (but not overly anxious) licensor and a hypothetical willing (but not overly anxious) licensee would have struck — could not apply.

While some courts at first instance have been willing to use a ‘reasonable royalty’ as a basis, Wilcox J’s concerns have been endorsed by Black CJ and Jacobson J in Aristocrat.

It is interesting to contrast this approach with the way the courts in the UK have dealt with it. Relying on some “old” patent cases (including a House of Lords decision), the Court of Appeal in Blayney (trading as Aardvark Jewellery) v Clogau St David’s Gold Mines was willing to use a “notional royalty” as the measure of the damages. The foundation of this approach was a rejection of the idea that the only loss suffered by the copyright owner was lost profits. Thus, in Watson, Laidlaw & Co Ltd v Pott, Cassels and Williamson (1914) 31 RPC 104, Lord Shaw expressed the principle:

wherever an abstraction or invasion of property has occurred, then, unless such abstraction or invasion were to be sanctioned by law, the law ought to yield a recompense under the category or principle, as I say, of price or hire. If A, being a liveryman, keeps his horse standing idle in the stable, and B, against his wish or without his knowledge, rides or drives it out, it is no answer to A for B to say: “Against what loss do you want to be restored? I restore the horse. There is no loss. The horse is none the worse; it is the better for the exercise.

and applied it in the context of patent infringement:

If with regard to the general trade which was done, or would have been done by the Respondents within their ordinary range of trade, damages be assessed, these ought, of course, to enter the account and to stand. But in addition there remains that class of business which the Respondents would not have done; and in such cases it appears to me that the correct and full measure is only reached by adding that a patentee is also entitled, on the principle of price or hire, to a royalty for the unauthorised sale or use of every one of the infringing machines in a market which the infringer, if left to himself, might not have reached. Otherwise, that property which consists in the monopoly of the patented articles granted to the patentee has been invaded, and indeed abstracted, and the law, when appealed to, would be standing by and allowing the invader or abstractor to go free. In such cases a royalty is an excellent key to unlock the difficulty, and I am in entire accord with the principle laid down by Lord Moulton in Meters Ld. v Metropolitan Gas Meters Ld. (28 R.P.C. 163). Each of the infringements was an actionable wrong, and although it may have been committed in a range of business or of territory which the patentee might not have reached, he is entitled to hire or royalty in respect of each unauthorised use of his property. Otherwise, the remedy might fall unjustly short of the wrong.

The Meters case was referred to by Wilcox J, but it does not seem that Watson, Laidlaw was cited to his Honour.

Now, of course, the 19th century considerations of a horse owner and “borrower” seem “quaint” in the age of Gogle and P2P torrents. But is the principle really so different?

It appears that the third member of the Court in Aristocrat, Rares J, may well have been willing to adopt the Watson, Laidlaw approach, but the evidence failed to provide a basis for any “judicial” estimate.

How much to pay for an infringement Read More »

Raising the bar – some differences between the Exposure draft and the Bill

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As noted previously, the Intellectual Property Laws (Raising the Bar) Amendments Bill was introduced earlier this week, following fairly extensive consultations on an exposure draft of the Bill.

Patentology has now looked at some of the differences in the proposed changes to the Patents Act between the exposure draft and the Bill as introduced here. His earlier post looked at the different transitional regime for the new standards for patentability.

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The Raising the Bar Bill

3 Comments / Copyright, Designs, Enforcement, IP generally, Patents, Trade marks / / / , , , , , , , , , , ,

Senator Carr introduced the Intellectual Property Laws (Raising the Bar) Bill 2011 into Parliament today.

Press release

Download the text of the Bill and EM from here (choose your own format).

You will remember that (according to the Press Release) the main objects of the Bill include:

  • raising patent standards to ensure Australian innovators are well placed to take their inventions to the world;
  • increasing penalties for trade mark counterfeiters;
  • improvements to border security measures for goods that infringe copyright and trade marks;
  • providing free access to patented inventions for researchers; and
  • cutting red tape and delays when seeking an IP right.

While there have no doubt been modifications to the text of the Exposure Draft (and Patentology flags a big change to the transitional provisions for the new patentability standards), you can get a very good feel for what the various parts of the Bill are trying to achieve:

in relation to patents from Dr Summerfield’s 8 part series over at Patentology:

  1. Part 1: inventive standard
  2. Part 2: usefulness
  3. Part 3: provisional specifications
  4. Part 4: enablement
  5. Part 5: claims supported by description
  6. Part 6: experimental use
  7. Part 7: miscellanea including standard of proof
  8. Part 8: transitional

Kim Weatherall also commented on a number of aspects, exploring in particular the (proposed) trade mark criminal offences.

You do need to bear in mind that these commentaries were on the text of the Exposure Draft and it was intended that anomalies identified through the Exposure Draft would be corrected in the Bill so, as I have already noted, there will be changes. Nonetheless, these comments should give you a good fell for what was being intended and issues that might be thrown up.

As you will see from the commentaries on the exposure draft, there are a host of issues to be considered. Time doesn’t permit anything but a cursory attempt on a couple of points here:

Item 113 of Sch 6 will replace the current s 41 of the Trade Marks Act (requiring a trade mark to be capable of distinguishing) with a new provision intended to reverse Blount and ensure that there is a presumption that a trade mark is registrable. It does this by requiring the Registrar to be satisfied that the trade mark is not capable of distinguishing before the Registrar can reject the application on this ground.

So clause 41(2) says “A trade mark is taken not to be capable of distinguishing … only if ….”

(Now I look at it, I wonder how long before it will be before someone tries to argue that “taken not to be capable of distinguishing” means something different to (and less than) “is not capable of distinguishing”. Oh well. Surely that one would be dispatched over the fence for six?)

While the Bill does seek to change the standard of proof against patent applications and patent oppositions from the existing “practically certain to fail” or “clear” type standard to the usual “balance of probabilities (see e.g. items 14 and 15 of Sch 1), no such amendment is proposed for trade mark oppositions. Therefore, the current state of uncertainty on this issue will continue (contrast e.g. Hills v Bitek at [43] – [55] to Sports Warehouse v Fry at [26] – [40]) , even though the school of thought favouring the “practically certain” or “clear” standard was imported from the Patents Act.

The bill will also introduce a whole new regime of oppositions to the registration of trade marks.

Item 18 of Sch. 3 will replace s 52 so that there is an obligation to file a Notice of Opposition which the Registrar, not the opponent, will serve on the applicant. Item 19 will introduce a new s 52A. This will require an applicant to file a notice of intention to defend or the application will lapse.

According to the EM, the regulations (when they are promulgated) will include power for the Notice of Opposition to specify the particulars of the grounds of opposition. The EM explains:

Opponents are currently required to state the grounds on which they intend opposing an application when they file their notice of opposition. However, they are not required to set out the particulars of those grounds. Frequently, this means that the opponent sets out all possible grounds, whether or not they have any intention of relying on them. As a result, the trade mark applicant may be faced with a number of grounds to deal with and no indication of which are key to the opposition until late in the opposition proceedings and sometimes not until the hearing

makes it difficult for the applicant to prepare their case. It also increases costs as the applicant is obliged to prepare a case in response to all grounds raised in the statement of grounds, including those on which the opponent may no longer rely.

The amendment addresses this problem by allowing for regulations to be made to require the opponent to file a statement of particulars of the grounds on which they intend to oppose. This will help focus oppositions earlier, reducing costs and unnecessary effort for the applicant.

The EM talks of the regulations conferring a power to require particulars. Whether this will be a discretionary power to be exercised on a case by case basis or an obligation on all opponents will need to await the terms of the regulations themselves. For example, the EM on items 24 and 25 states that opponents will be required to file both statements of grounds and particulars and  the last paragraph of the EM on item 17 states that the particulars will be required to be filed within 1 month of the filing of the Notice of Opposition.

The regulations will also apparently include a power to amend the statement(s) of grounds and particulars. However, the EM on items 24 and 25 states:

The regulations will only permit the opponent to amend the statement of grounds and particulars under tightly controlled circumstances.

The Federal Magistrates Court will get original jurisdiction in matters under the Designs Act and the Trade Marks Act alongside its existing original jurisdiction in copyright and (what used to be called) trade practices matters.

 

 

The Raising the Bar Bill Read More »